Segmentation Marketing: New Methods for Capturing Business Markets

• A definition of segmentation and discussion of its benefits.
• A definition of "needs" and guidelines for operationalizing those concepts.
• A framework for augmenting business markets.
• Guidelines for conducting the market research necessary for identifying needs.
• The strategic applications of needs-based segmentation.
• A working description of tactical applications relating to the marketing mix.
• The design and implementation of a market information system.
• A framework and guidelines for implementing this approach.
• A hypothetical case study showing how a sustainable advantage is created by needs-based segmentation

After years of striving to bolster their organizations through restructuring, cost cutting, and empowering employees, senior management is once again focusing efforts on the fundamental corporate battleground: the marketplace. But as the search intensifies for the "holy grail" of marketing strategies and catchy buzzwords fill business press, management must not lose sight of the fact that customers acquire products and services to satisfy needs.

Clearly, marketing success will be determined by management's ability to gain an intimate understanding of customer needs. The problem, of course, is that when dealing with diverse business customers and organizations with complex product technology and decision-making structures, understanding and fulfilling those needs pose enormous hurdles.

In Segmentation Marketing: New Methods for Capturing Business Markets, John Berrigan and Carl Finkbeiner show how the mystery surrounding the needs of medium-to-large business customers can be removed. They offer solutions for identifying needs and provide a framework for developing and implementing strategic and tactical applications that can lead (and have led) companies to competitive and financial success.

According to the authors, the process of needs identification begins with a recognition of the six principles of purchasing behavior in business markets:

• Multiple organization levels influence purchasing decisions.
• Needs reflect responsibilities of different levels.
• External/internal conditions influence importance of needs.
• The degree of influence is tied to the perceived importance of the purchasing decision.
• Groups or segments have similar, yet distinct, needs.
• The interaction of internal and external conditions enable/constrain needs realization.

Once these principals are understood, the authors contend, a market-based framework can be constructed that enables organizations to:

• Differentiate products/services meaningful to the customer base.
• Improve competitive positioning.
• Shape products and pricing to fit the most promising markets.
• Realize economies by:
  • Concentrating on profitable products or services.
  • Targeting marketing and selling efforts.

Unlike other business philosophies or strategies, segmentation marketing is not dependent on a single focus such as quality or downsizing. Instead, it advocates the adoption of a comprehensive vision grounded in the fundamental "blocking and tackling" activities of marketing and selling. The end result is an integrated business strategy that embraces long-range, minimum-risk business planning; cost-effective product development; and sales force and distribution systems which are sensitive to market demands.

In sum, this book offers a comprehensive method for producing a competitive advantage that can withstand the test of time and increasing competition—in whatever form it arrives.

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Market Segmentation Research
Product Development
Customer Satisfaction Market Research
Brand Marketing Research
Pricing Strategy Research
Demand Forecasting